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Bank of India Ltd. Vs. Chairman and Members of the Labour Appellate Tribunal of India and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Case NumberMatter No. 103 of 1953
Reported inAIR1955Cal344,58CWN844,(1955)IILLJ214Cal
ActsIndustrial Disputes (Appellate Tribunal) Act, 1950 - Section 7
AppellantBank of India Ltd.
RespondentChairman and Members of the Labour Appellate Tribunal of India and ors.
Appellant AdvocateAdv. General, ;S.M. Bose and ;Ajay K. Basu and ;Santosh K. Basu, Advs.
Respondent AdvocateA.K. Sen, ;S.K. Acharya and ;A.N. Banerjee, Advs.
Cases ReferredEugene Fernandes v. Labour Appellate Tribunal of India
- .....three months' basic salary plus allowances.11. against this decision there was an appeal to the appellate tribunal. the first point that the appellate tribunal was called upon to decide was whether an appeal lay. under section 7, industrial disputes (appellate tribunal. act, 1950, the appellate tribunal would have jurisdiction in this case if the appeal involved any substantial questions of law. the appellate tribunal has come to the opinion that there existed a substantial question of law because the tribunal had ignored the principles of law which should be kept in view in considering the question of reinstatement and had introduced considerations which, in the opinion of the appellate tribunal, were extraneous. according to the appellate tribunal, the principles of law which must.....

Sinha, J.

1. The facts in this case are shortly as follows : The petitioner is the Bank of India Ltd. (hereinafter called the Bank). Respondents 2-13 were employed by the Bank in its office at 23B, Netaji Subhas Road. Respondents 2, 3, 4, 5, 6 and 10 were appointed as clerks on probation, respondents 7, 8 and 9 were temporary clerks and respondents 11, 12 and 13 were temporary sepoys, also employed as peons.

2. These persons were appointed at various periods between March and May 1951. According to the terms of their appointment, they were on probation and were liable to be dismissed within six months of their appointment, or at the expiration of that period, without assignment of any reason whatever for such dismissal. It is not disputed before me that all of them were in temporary employment and they were not confirmed and made permanent at any time. The employees of the Bank were having disputes with the Bank for some time. Ultimately, notice was given through their Union that unless their grievances were acceded to, there would be a general strike on 24-12-1951. This was immediately prior to the annual closing of accounts and the intention was obviously to paralyse the working of the Bank.

3. At the relevant time, the Bank had 37 temporary employees including the said respondents, and an effort was made to ensure that the work of the Bank was carried on through the temporary employees, if there was a strike by the permanent hands.

4. On 23rd and 24th December 1951, the respondents 2-10 except 4, absented themselves from work. On 24-12-1951, notice was given by theAgent that temporary clerks and clerks on probation were quite on a different footing to that ofthe permanent employees and that they wouldcease to be in the Bank's employment if they absented themselves from duty during the strike,without leave; and that the Bank would not under any circumstances entertain any request forre-employment.

5. On 25th, 26th and 27th December, 1951, not only the aforesaid respondents but respondents 4, 11, 12 and 13 also did not join work. Alt other temporary hands obeyed the direction of the Bank and attended work. On 24-12-1951, the Agent wrote individual letters to some of the respondents asking them to join duty on or before 27-12-1951, in default of which their services would be liable to termination. Similar letters were addressed to the other respondents subsequently. None of the respondents, however, carried out the request of the Agent and none did attend work. They did not even send any reply to the letters. On 27-12-1951 and on 31-12-1951, the Bank issued letters terminating the services of respondents 2-13. The Bank has subsequently appointed other persons in the place of the said respondents.

6. By notification dated 22-7-1952, the dispute regarding respondents 2-13 was referred for adjudication to an Industrial Tribunal formed by Shri K.S. Campbell-Puri. The dispute that was referred was as follows:

'Whether the termination of the services of the undermentioned persons (meaning respondents 2-13. from the Calcutta Branch of the Bank was justified and, if not, what relief should be accorded to them.'

7. The Tribunal decided that the employer could not be allowed to treat the temporary and probationary employees working in the same industry, on a different footing to the permanent employees, in the matter of redress of grievances through a strike. It then proceeded to consider whether the conduct of the employees justified their discharge. According to the tribunal, if the employees were dismissed after six months, the contract provided by implication that reasons must be assigned and no reasons were assigned.

This is of course entirely incorrect. Because there is a clause that the employer could dismissal any time within six months or at the expiry thereof without assigning any reason, does not give rise to any implied agreement to assign cause after the expiry of that period, for a dismissal. In strict law, the employer would be entitled to dismiss as employee upon giving reasonable notice. But notwithstanding the ordinary law applicable between a master and servant, the tribunal was justified in dealing with the question from the point of view of unfair labour practice and industrial peace. What the tribunal says is as follows:

'The other agreement was that the applicants failed at the critical time, i.e., on 23-25th December on the closing of the year and as urged by Shri Basu although they agreed to come, yet did not turn up and betrayed the employer on these crucial dates. The employee who came into the witness box was not asked these questions specifically as to whether the applicants agreed but even if it may be taken as such, I fail to understand how this one circumstance can justify the action of the employer in terminating their services when there was picketing and it was within the range of possibility that if they had come, they would have been thwarted from entering into the premises or to have incurred some risk when the strikers, were also on the march to dissuade any one to take up work. All these circumstances have some evidential value and taking a broad view of the case, I am of the opinion that it is not established on the record that they deliberately failed to join their duty when called upon, if for the sake of argument it may be grafted that they did not join the strike.'

8. I confess that the reasoning is far from being clear. If the point for decision was as to whether the employees had deliberately absented themselves or not, that could only be decided upon the facts as they happened. I do not see how the point could be decided upon ascertaining what was within the range of possibility. The Tribunal ultimately came to the following conclusion:

'On ultimate analysis, the position boils down to this that the applicants either participated in the strike and as such, failed to join duty along with others or they could not join in the picketing which fact was not disputed. Both these factors do not go against the applicants and the finding is that the bank was not justified in terminating their services in the manner they adopted.

9. I shall proceed on the footing of this conclusion, since it is not the correctness of it that has been made the basis of this application. The real point in this application relates to the relief that was granted by the Tribunal, which is as follows:

'The next question is one of relief. The applicants were admittedly either probationers or temporary hands and even in general principles of employment, they have no right upon the employer to continue in service even if the employer be called upon to take them back in service. The management naturally would be within its right not to confirm them or after some time dispense with their service on some other reasons. Without elaborating the point further, I am of the definite opinion that it is not a fit case in which reinstatement should be allowed.'

10. The Tribunal granted six months basic salary plus allowance to all the employees by way of relief for unjustifiable discharge, excepting G. Bhattacharjee who was to get three months' basic salary plus allowances.

11. Against this decision there was an appeal to the Appellate Tribunal. The first point that the Appellate Tribunal was called upon to decide was whether an appeal lay. Under Section 7, Industrial Disputes (Appellate Tribunal. Act, 1950, the Appellate Tribunal would have jurisdiction in this case if the appeal involved any substantial questions of law. The Appellate Tribunal has come to the opinion that there existed a substantial question of law because the Tribunal had ignored the principles of law which should be kept in view in considering the question of reinstatement and had introduced considerations which, in the opinion of the Appellate Tribunal, were extraneous. According to the Appellate Tribunal, the principles of law which must govern the reinstatement of dismissed employees are to be found in its decision in the case of -- 'Buckingham & Carnatic Co. Ltd. v. Their Workers', 1952 Lab AC 490 (Cal. (A). The relevant passage runs as follows:

'We will now deal with the question of reinstatement where the termination of service in any of the aforesaid three types of cases is held by the Tribunal to be wrongful or unjustifiable. These questions would involve the determination of the circumstances under which reinstatement or payment of compensation instead of rein statement is to be ordered. The normal rule in such cases should be reinstatement, but in so ordering, the Tribunal is expected to be inspired by a sense of fair play towards the employee on the one hand and consideration of discipline in the concern on the other. The past record of the employee, the nature of his alleged present lapse, and the grounds on which the order of the management is set aside are also relevant factors For consideration. It is not possible to lay down rules which could be regarded as exhaustive on the subject. Each case would have to be considered on the merits but within the general frame-work of the principles indicated above.'

12. According to the Appellate Tribunal, theseprinciples were not followed and the Tribunal tookinto consideration a factor which was extraneous.Hence, according to the Appellate Tribunal, therewas a substantial point of law involved and theappeal was competent.

13. In my opinion, the Appellate Tribunal was wrong in holding that there was any substantial question of law involved in the case. That the Industrial Tribunal could grant the relief of reinstatement, there Can be no doubt. This point has been laid at rest by the decision of the Federal Court in -- 'Western India Automobile Association v. Industrial Tribunal, Bombay', MR 1949 FC 111 (B). It has been held that reinstatement is one of the reliefs that an Industrial Tribunal can grant. Mahajan J. (as he then was. said as follows:

'The relief is not of such an unusual character that it may be wholly ruled out as one of the legal reliefs which the Courts can grant. This relief of reinstatement is on the same footing as the relief of restitution. Restitution can be granted in integrum in certain cases. All that is required is that the ex-employee should be restored to the previous position so far as capacity, status and emoluments are concerned and there is nothing extraordinary in such restoration being ordered when considered necessary in the interests of peaceful settlement of industrial disputes. Adjudication does not, in our opinion, mean adjudication according to the strict law of master and servant. The award of the Tribunal may contain provisions for settlement of dispute which no Court could order, if it was bound by ordinary law, but the Tribunal is not fettered in any way by its limitations. In Vol. I of 'Labour Disputes & Collective Bargaining' by Ludwig Teller, it is said at p. 536 that industrial arbitration may involve the extension of an existing agreement or the making of a new one or in general the creation of new obligation or modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements. In our opinion, it is a true statement about the functions of an Industrial Tribunal in Labour disputes.'

14. It will thus be seen that while reinstatementis one of the recognised reliefs that may be granted in an industrial arbitration, it is based on theprinciple that the arbitrator has to bring aboutindustrial harmony between the employer and theemployee and is not fettered by the ordinary lawof contract. It must necessarily depend upon thefacts of each case and the discretion of the Tribunal. There is, therefore, no principle of law involved. The question is purely one of facts. TheAppellate Tribunal has no jurisdiction to legislateand while it can lay down certain pointers for theguidance of those who are engaged in the task ofindustrial arbitrations, it is wholly beyond its jurisdiction to lay down the law.

To a conservative mind, it may seem dangerous to decide matters merely upon the exigencies of the situation untrammelled by the limitations of law. This, however, has come to pass in the case of industrial relations, because of the explosive possibilities inherent in an industrial conflict. We cannot, however, say on the one hand that the arbitrator in the case of an industrial dispute is not bound by the law of contract or of master and servant as we know it, and yet speak about the violation of legal principles. In the decision of the Appellate Tribunal mentioned above ('Buckingham & Carnatic Co. Ltd. v. Their Workmen (A)' --supra. it has been clearly pointed out that each case would have to be considered on its own merits and was dependent on its own facts.

If the Tribunal is to act on the facts of each case and to exercise its own discretion for bringing about industrial peace and harmony, I do not see how it is at all possible to lay down any hidebound principles of law. Giving the matter the most generous interpretation, it must necessarily amount to fettering the discretion of the original Tribunal which is beyond the jurisdiction of the Appellate Tribunal.

15. This aspect of the question has been well brought out in an unreported bench decision of the Bombay High Court -- 'Eugene Fernandes v. Labour Appellate Tribunal of India at Bombay', since reported in : (1954)ILLJ623Bom . The facts of that case were as follows:

Fernandes was employed by the respondent company as a driver. On 28-11-1952, he was on duty at the Santa Cruz Aerodrome in an area where smoking is prohibited. The company wanted to dismiss the petitioner and applied for permission of the Industrial Court. The Industrial Court refused permission, whereupon the company preferred an appeal before the Appellate Tribunal which reversed the decision. An application was made under Article 226 before the High Court of Bombay against the order of the Appellate Tribunal on the ground that the Appellate Tribunal had no jurisdiction to entertain the appeal as it did not involve any substantial question of law. Chagla C.J. allowing the application, said as follows: 'When the Industrial Tribunal refused to grant permission it exercised a discretion conferred upon it by Section 33; and the very narrow question that arises for our determination is that, when a Court upon which discretion is conferred exercises that discretion, under what circumstances is an appellate tribunal entitled to interfere on the ground that a substantial question of law arises with regard to the exercise of that discretion. We should have thought that the principles with regard to this matter are fairly well-settled. When a law confers upon a Court a discretion, it does not mean that the discretion can be exercised arbitrarily or capriciously by that Court, The discretion must be exercised judicially; and if the Court fails to exercise the discretion judicially, then undoubtedly the higher court can interfere on the ground that a principle of law was involved. It may also be that if the Court exercising discretion fails to apply established principles of law, then the higher court can correct the exercise of that discretion. It may also be that the Court exercising discretion may wrongly apply well established principles of law, in which case it may also be conceded that higher court would have a right to interfere with the exercise of that discretion. But if the discretion has been judicially exercised, then it is not competent to the higher court to interfere with the exercise of that discretion on the ground that if the discretion had been conferred on the higher court, the higher court would have exercised it differently. Interference with the exercise of discretion vested in a court, except on the ground which we have just mentioned, can never be a question of law, much less substantial question of law.'

16. The position, therefore, may be summarized as follows:

1. In an industrial arbitration, restitution of a dismissed employee is permissible.

2. Such a restitution does not depend upon the strict law of master and servant. It is to be resorted to when considered necessary in the interest of a peaceful settlement of industrial disputes. As such, it depends on the facts and circumstances of each case and the granting of the relief is based upon the discretion of the arbitration tribunal, to be exercised after taking into consideration the circumstances of each case, looking at it from the point of view of both the employer and the employed.

3. It follows that this is a power which is, in essence, peculiar to adjudication of labour disputes, since no court which is fettered by ordinary law could make any such order.

4. The power in the original tribunal being discretionary and based on the facts and circumstances of each case, no principle of law can be enunciated which governs its exercise. The enunciation of any hidebound principle necessarily results in fettering the discretion of the industrial tribunal. All that the Appellate Tribunal can do is to lay down pointers. These are, however, to be rated no more than as words of wisdom and good counsel. They do not constitute the law.

5. The matter being one of discretion, the appellate court can interfere, only if the discretion is exercised arbitrarily or capriciously. The original tribunal may take a wrong view of facts, or come to an erroneous conclusion on given facts. It might decide to grant a relief which is either inadequate or excessive, or such as would never be granted by the Appellate Tribunal on the same facts. In all this however, there is no question of law involved, much less a substantial question of law, and the appellate tribunal has no jurisdiction to interfere.

17. In the Bombay case mentioned above, the learned Chief Justice conceded that the appellate tribunal might be perfectly right in the view that it had taken as to the nature of the offence, its gravity, and the proper punishment that should have been meted out. It could not, however, substitute its own findings in the place of that of the original tribunal. It was not an appeal court on facts.

18. In the present case, the appellate tribunal has proceeded on the footing that the original Tribunal had ignored the principles which should be kept in view in considering the question of reinstatement. If these were principles of law, which the Tribunal was bound to follow in each case, then the Appellate Tribunal would be perfectly justified in enforcing their strict observance. As I have pointed out above, there is no principle of law involved. If there is any principle involved, it is one of expediency based on the facts of each particular case, and depending upon the discretion of the adjudicating Tribunal.

The Appellate Tribunal has come to the further finding that the original tribunal had introduced into the matter irrelevant or extraneous questions. If the original Tribunal has taken into account factors, which had no connection whatsoever with the question of reinstatement, that would render its decision arbitrary and capricious, in which case the Appellate Tribunal would certainly have jurisdiction to interfere. If however, the point is at all connected with the issue of reinstatement, then it is not open to the Appellate Tribunal to consider the weight to be attached to it, or in what fashion it might have affected its own verdict.

The Appellate Tribunal states that if termination of service is found to be unjustified, the 'normal rule' is reinstatement. That, as I have said, is no rule of law. Naturally, if an employee comes up with the complaint that he has been wrongly dismissed, the relief that he would normally ask is to be reinstated. Whether he will do so in a given case or whether in such a case it will be expedient to grant his prayer, necessarily depends upon an infinite variety of circumstances, and no rule-of-thumb can be laid down. To ensure industrial peace, the arbitrator must not only look at the question from the point of view of the employee but also from the viewpoint of the employer. It may be, that the reinstatement of a dismissed employee in a given case will result, not in ensuring industrial peace, but in destroying it. How, then, is it possible to lay down anything which can be called a 'rule of law', when the matter must necessarily depend on the facts of each case?

In this particular case it is an admitted fact that the aggrieved employees were temporary servants; The contract in their case was that they might be dismissed any time within six months or at the expiry thereof without assigning any reason. In strict law, the employer could, notwithstanding the expiry of six months, dismiss the employees upon giving reasonable notice. It is true that the Industrial Tribunal was not bound to decide according, to the strict terms of the contract or the law of master and servant, but it was quite justified in not shutting its eyes to the nature of the contract' of employment and in considering the circumstances that might arise in the immediate future. It apprehends that if these temporary employee are thrust upon the employer, the inevitable result would be that after a time the employer wilt exercise his rights of dismissal, and it must have thought that it would confer a greater benefit upon the employees if they were granted sis months basic salary plus allowances by way of relief, a payment which they might not receive in future if they were dismissed in terms of their contract.' I am unable to agree with the view of the Appellate Tribunal that such considerations are wholly irrelevant or extraneous. As to what weight should be attached to such considerations is another matter altogether, upon which opinions may differ. It is, however, no ground to interfere with the finding of the original Tribunal, because under similar circumstances, the appellate tribunal would have arrived at a different conclusion and granted a different relief.

19. It must also be observed that in the judgment of the Appellate Tribunal, various facts have been examined 'de novo'. The evidence has been examined, discussed, and the defects therein pointed out. The Appellate Tribunal states as follows: 'The Tribunal, in our opinion, ought riot to have proceeded on considerations which would be imputing bad faith to the employer for defeating an order for reinstatement and which may have the effect of encouraging acts of bad faith on their part. Whether the employer would have adopted the device of turning these clerks out after nominally, complying with the order of reinstatement is a factor which, in our opinion, is irrelevant for the purposes of considering what form of relief should be given.'

20. There is no question of bad faith at all. If the contract of employment between the employer and the employee enables the employer to terminate the services of the employed, there is no bad faith in attempting to exercise that legal right. An Industrial adjudication can at best mean that a particular dispute has been decided in a particular way to ensure industrial peace at a particular point of time. That does not take away the legal rights either of the employer off the employed, and if the employer thereafter exercises his legal right there can be said to be no act of bad faith, and I do not see how any future dismissal can be called a 'device', if the employer was doing no more than exercising his legal right. That expression would have been appropriate if it was apprehended that the employer would do something unlawful The question really, is, as to whether the original Tribunal should have relied upon this fact, namely, the precarious nature of the employment of the aggrieved employees, or not, and whether it should have allowed the relief granted, to be coloured by such a consideration. This is not, in my opinion, a question of law and certainly not a substantial point of law. There is therefore no substantial point of law involved in this case and the Appellate Tribunal had no jurisdiction to entertain the appeal.

21. The result is that this rule must be made absolute and there will issue a writ in the nature of certiorari quashing and/or setting aside the decision of the Industrial Disputes Appellate Tribunal dated 15-9-1953 mentioned in the petition. The respondents are also prohibited from acting upon or giving effect to the said decision.

22. In the facts and circumstances of this case, there will be no order as to costs.

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